Forward

After visiting sites like this and reading a view books, I gradually came to understand the basics of trading options. Trading directionally (with puts and calls) I promptly lost my shirt. I was speculating on a corporate takeover. Unfortunately, the takeover never occurred. In retrospect, it was probably a good thing I lost money initially. Options are a form of leveraged investing and unless one has the Midas touch, there are times when you will lose money quickly.

With some level of education, you can learn how to trade options to support a variety of investment goals. Those goals include executing speculative investments, protecting existing profits, setting contingent prices for entering (or exiting) the market and ensuring against dramatic downward moves in the market.

Trading options can be fast-paced, fun and potentially profitable, as well as intellectually stimulating. This site will get you started on the journey that will include an introduction to profit curves, option pricing models and strange little metrics called “The Greeks”.

Learn Option Trading. Trade Options Online.

Start With the Basics

The reason trading options can be fun is because it involves layered strategies. To begin with you have two basic long positions – calls and puts. You can buy call options if you think an underlying stock will go up and you can buy put options if you think the underlying stock will go down. You can also go short (sell) options on both the call side and the put side. Multi-leg strategies add another dimension. Trading options is like playing Chess. It makes you use your brain.

Here’s how I recommend you move forward. First, learn what the difference is between intrinsic value and time value. I did a short video on each concept. Then understand the basics behind buying calls and puts. Finally, graduate into shorting options as part of “spread strategies”.

But before we get to spreads, let’s start with the basics.

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About This Site

This site is dedicated to providing the basics of trading options from the point of view from someone who DOES NOT trade options for a living. I am a self-directed investor and I have a real job, too. I do things in my life that are both creative and mundane. Trading options happens to be one of the more stimulating life activities – that is, of course, if you come out ahead on a trade or two.

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, please read Characteristics and Risks of Standardized Options.

Forward After visiting sites like this and reading a view books, I gradually came to understand the basics of trading options. Trading directionally (with puts and calls) I promptly lost my shirt. I was speculating on a corporate takeover. Unfortunately, the takeover never occurred. In retrospect, it was probably a good thing I lost money initially. Options are a form of leveraged investing and unless one has the Midas touch, there are times when you will lose money quickly. With some level of education, you can learn how to trade options to support a variety of investment goals. Those goals include executing speculative investments, protecting existing profits, setting contingent prices for entering (or exiting) the market and ensuring against dramatic downward moves in the market. Trading options can be fast-paced, fun and potentially profitable, as well as intellectually stimulating. This site will get you started on the journey that will include an introduction to profit curves, option pricing models and strange little metrics called “The Greeks”. Learn Option Trading. Trade Options Online. Home Option Basics Covered Call Long Call Long Put Debit Spreads Straddle Strangle Iron Condor Option Blog Start With the Basics The reason trading options can be fun is because it involves layered strategies. To begin with you have two basic long positions – calls and puts. You can buy call options if you think an underlying stock will go up and you can buy put options if you think the underlying stock will go down. You can also go short (sell) options on both the call side and the put side. Multi-leg strategies add another dimension. Trading options is like playing Chess. It makes you use your brain. Here’s how I recommend you move forward. First, learn what the difference is between intrinsic value and time value. I did a short video on each concept. Then understand the basics behind buying calls and puts. Finally, graduate into shorting options as part of “spread strategies”. But before we get to spreads, let’s start with the basics. Subscribe in a reader About This Site This site is dedicated to providing the basics of trading options from the point of view from someone who DOES NOT trade options for a living. I am a self-directed investor and I have a real job, too. I do things in my life that are both creative and mundane. Trading options happens to be one of the more stimulating life activities – that is, of course, if you come out ahead on a trade or two. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, please read Characteristics and Risks of Standardized Options.